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Migration Economy: Who are the migrants starting businesses in Austria?

Self-employed migrants - or those building businesses in Austria - contribute hugely to the local economy, a new study has found.

Migration Economy: Who are the migrants starting businesses in Austria?
Crowds walk past a clothing store at Vienna's famous shopping street, Mariahilferstrasse, in Vienna, Austria. (Photo by JOE KLAMAR / AFP)

People born outside of Austria rely, in large part, on self-employment or opening up businesses (and then employing other migrants) as a path to working in the country, a study conducted by the Institute of Advanced Studies (IHS) on behalf of the Integration Fund (OeIF) found.

The study, Migration Economy in Vienna (Migrantische Ökonomien in Wien), also found that some nationalities tend to stick to specific industries – which could be partially explained by how migrants rely on informal networks of people of the same origin to start a business.

READ ALSO: Being self-employed in Austria: What you need to know

For example, people from the former Yugoslavia, Eastern Europe and Turkey often work independently in the construction sector. People from China are strongly concentrated in gastronomy, along with people of Turkish, Syrian, Thai and Maghreb origin.

Migrants originally from Asia and Africa, and especially India, Egypt and Afghanistan, are concentrated mainly in postal and courier services, including bicycle messenger services. Finally, the study found that people from Turkey and former Yugoslavia also appear more often than average registered as taxi drivers.

How much money do they bring in?

Figures from Austria’s Chamber of Commerce (Wirtschaftskammer) showed that business owners in Vienna with a migration background generate € 8.3 billion in revenue and create around 45,500 jobs. 

Plus, these companies pay around € 3.7 billion every year in taxes and duties.

Walter Ruck, President of the Vienna Chamber of Commerce, said: “Companies with a migrant background not only enrich the diversity of the corporate landscape in Vienna, but they are also an economic factor.”

READ MORE: Diversity and jobs: How migrants contribute to Vienna’s economy

Who are these migrants?

Part of the survey involved a qualitative research with migrant entrepreneurs in Vienna, but also a comprehensive quantitative data analysis of registered businesses.

Many of the entrepreneurs interviewed were first generation (meaning they were not born in Austria), and most were between 26 and 35 years old and male. In total, the small businesses surveyed employed two to a maximum of four employees, most of whom were related to the owner.

READ ALSO: EXPLAINED: The main Austrian ‘tax traps’ foreigners should be aware of

The entrepreneurs with a migrant background who were interviewed generally either did not have higher school-leaving qualifications (known in Austria as the Matura) or have not yet had their foreign certificates recognised in Austria and therefore do not work in their sector of study. 

First-generation migrants, in particular, tend to have lower educational qualifications, which has a negative impact on their chances in the labour market, the study said. Because of that, the respondents named a lack of occupational alternatives as one of the decisive factors for starting a business.

Additionally, many of the respondents said they relied on a network of people from their own nationality for help setting up a business. Many of them weren’t aware of the support offered by official bodies, including the Chamber of Commerce. 

READ ALSO: What is the new cost of living ‘credit’ for self-employed people in Austria?

The study concluded that language barriers and some cultural aspects played a role, but since most entrepreneurs were interested in getting more detailed information on starting and running businesses, there was potential for better communication and targeting by the public offices.

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LIVING IN AUSTRIA

‘Bad-tempered locals’: Vienna ranked the world’s ‘unfriendliest city’

Foreigners in Vienna say the city offers excellent health and transport benefits but has an exceptionally unfriendly population.

'Bad-tempered locals': Vienna ranked the world's 'unfriendliest city'

The Spanish port city of Valencia is the most popular city among international employees this year, followed by Dubai and Mexico City, according to the “Expat City Ranking 2022” by Internations, a network for people who live and work abroad.

The ranking is based on the annual Expat Insider study, in which almost 12,000 employees worldwide participated this year. The report offers insights into the quality of life, settling in, working, personal finances and the “Expat Basics” index, which covers digital infrastructure, administrative matters, housing and language.

Vienna ranks 27th out of 50 cities in this year’s ranking. Although it scores very well in terms of quality of life, many expats find it difficult to settle in and make friends in the Austrian capital.

READ ALSO: REVEALED: The best and worst districts to live in Vienna (as voted for by you)

Vienna ranks last in the Ease of Settling In Index and also in the Local Friendliness Subcategory. 

Nearly half the respondents in the city (46 percent) say that people are unfriendly towards foreign residents (vs 18 percent globally), and 43 percent rate the general friendliness of the population negatively (vs 17 percent globally). 

An Australian immigrant told Internations they were unhappy with the seemingly “bad tempered locals”, while a survey respondent from the UK said they struggled to get along with the “conservative Austrians” in Vienna.

Unsurprisingly, more than half of the expats in Vienna (54 percent) find it challenging to make friends with the locals (vs 37 percent globally). Moreover, around one-third (32 percent) are unhappy with their social life (vs 26 percent globally), and 27 percent do not have a personal support system in Vienna (vs 24 percent globally). 

“I really dislike the grumpiness and the unfriendliness,” said an immigrant from Sweden.

READ ALSO: The downsides of Vienna you should be aware of before moving there

In the Quality of Life Index, Vienna snagged first place last year, but it reached only seventh place this year. In terms of administrative matters such as getting a visa for residence, Vienna is only 38th, and the federal capital also scores poorly for cashless payment options (42nd).

Where does Vienna shine?

The Austrian city ranked particularly well in categories including Travel and Transit (first place) and Health and Well-being (second place). International employees rated the availability, cost and quality of medical care as particularly good.

“I like how much you can do here and how easy it is to get around by public transport,” said an expat from the US. 

In addition, Vienna is not particularly expensive and ranks ninth worldwide in the personal finance index. 

READ ALSO: Five unwritten rules that explain how Austria works

Vienna ranks 26th out of 50 cities in the Working Abroad Index. Sixty-eight percent of expats rate their job as secure, and two-thirds rate their work-life balance positively – compared to 59 percent and 62 percent globally. However, 23 percent of respondents are dissatisfied with their career opportunities, and a third feel that the corporate culture in Vienna lacks creativity and unconventional thinking.

In the “Expat Basics” index, international employees consider housing in Vienna particularly affordable (9th). In addition, eight out of ten find it easy to open a local bank account (vs 64 percent worldwide).

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